> Account opening request, identification of the contracting party and of the UBO (CDB forms 2020), KYC
> Complex situations: multiple nationalities / domiciles, dates of birth, dubious identity documents
> Common errors: utility bills, unacceptable identity documents
Introduction
- The client is required to provide certain documents and information for identification, verification of identity, and due diligence (KYC).
- This includes official documents (identity documents, corporate documents, notarized deeds for fund origin, etc.) and non-official documents (business cards, private contracts, professional and personal background information, etc.).
- But before anything else: Who is the client? Is he the contractual party or the beneficial owner?
REMINDER OF INFORMATION AND DOCUMENTS TO BE OBTAINED
Account opening request: what information to collect ? Mistakes to be avoided
- Recording required data for verifying the contractual counterparty’s identity
- Personal data required for individuals: name, first name, date of birth, place of birth, nationality(ies), actual residential address
- Reminder: Is recording a single nationality sufficient? What about dual nationals?
- Required data for legal entities: company name, domiciliary company vs. operational company, actual registered office address
- Type of identity document received / Number / Place of issuance (valid ID)
- Mode of dispatch/communication (email, mail, retained mail)
- Frequency of communication for statements
- Correspondence/communication address
- Mention of attached documents (General Conditions, other documents)
- Other details (e.g., current account currencies, reference currency, etc.)
- Date / Individual signature?
Identification of the contracting party: Which documents to obtain from the client? Mistakes to be avoided
- For an individual: A valid identity document of the counterparty
- For a legal entity’s counterparty: Extract from the commercial register / other recognized document / corporate documents
- For a trust: obtain the identity of the trustee (he is the account holder (CDB))
- Power of representation for legal entities: Extract from the commercial register or board of directors’ decision?
- Focus: 1) Identity document; 2) Commercial register extract
- Online extract from the commercial or companies register?
Identification of the Beneficial Owner (UBO): How to fill out the CDB 2020 Forms ?
- Controlling party: What is a controlling party in relation to a BO?
- Requirement for an identity document copy (ID)? What is the practice?
- Required data to record: name, first name, actual residential address
- Beneficial owner:
- Requirement for an ID copy? Requirement for identification and verification of the beneficial owner. Required data: name, first name, date of birth, nationality, actual residential address, and country of residence. What if the BO only has a «care of» address? Or no tax residence?
- Trust settlor/Founder/Beneficiaries: similar data required as for beneficial owners.
The KYC Document / Client Profile: what information and documents to request from the client ?
- Who is the client? Where is the client? Where does the client conduct their professional activities?
- Purpose of the account: Why does the client want to open an account with the financial intermediary? Wealth management account or transactional banking?
- What is the client’s personal and family situation?
- What is their current and recent professional situation? What about their financial situation? What is the origin of their wealth and its evolution? And what is the origin of the funds involved in the business relationship?
- Asset composition vs. total wealth?
- Actual domicile, tax residence, or absence of an actual domicile: what should be done?
- Expected wealth and anticipated transactions: why?
- Political status or exposure: PEP or associated with a PEP?
- Purpose of using a domiciliary company within a complex structure?
Tax documentation
Compliance with reporting obligations (CRS/FATCA), status concerning CRS – beware of pitfalls related to client declarations without verification by the financial intermediary.
Sanctions
- How and where to gather the necessary information to assess the client’s exposure to international sanctions? Should annual reports be requested, social media reviewed, or web searches conducted? How to react if no information on the client is found through search engines?
- How to analyze the geographical dispersion of clients concerning sanctions and their activities?
COMPLEX SITUATIONS, COMMON ERRORS
Complexity when
- The client has multiple nationalities – What should be done?
- The client has multiple residences or domiciles – Does this impact KYC or rather cross-border activities?
- The client has different birth dates appearing on identity documents – Is this possible or a forgery?
- Identity documents appear to be falsified – How to verify passport authenticity?
- The account undergoes changes in beneficial owners.
Reminder of certain aspects or concepts that are often misunderstood or imprecise
- Origin of wealth vs. origin of funds
- Definition of PEP by association
- Should identity documents of individuals be automatically renewed?
- Should the address recorded on the BO’s Form A also be verified?
- For address verification, should client utility bills (e.g., water, gas, electricity), and tax statements be obtained?
Common errors in various cases
- Common mistakes when the client claims his wealth originates from an inheritance
- The client has taken a significant stake in a company, financing this investment partly with his wealth and partly with a loan; what is the KYC mistake?
- Errors in corroborating the client’s source of wealth and source of funds
- Beneficial owner or nominee?
- Which types of identity documents are not acceptable?
- Utility bills: which should be considered?
- Does the company still exist?
SPEAKERS
Olivier Maes, Executive Director, GRC, Head Regulatory Compliance and Financial Crime, Forvis Mazars, Switzerland and Liechtenstein
What information and documents are required to onboard clients (physical persons): Reminders, complex situations, mistakes
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Additional participants from the same company: -50%
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